Eating bitter

Professional cyclists poured into Beijing in October for the inaugural Tour de Beijing bike race. There was the usual clamor about Beijing’s infamously soupy air, but that was not the athlete’s only health-related concern. The event organizers also quietly advised visiting cyclists to stick with vegetarian options during their stay in the Middle Kingdom.

Despite government claims to the contrary, tainted food and beverages have remained an almost constant risk in China. Far too often, the annoyance swells into catastrophe as consumers, often children, are poisoned or killed by contaminated products.

Yet you do not have to live in China to be affected by the country’s lax enforcement of food safety standards. Chinese food exports are projected to rise 400% between 2010 and 2020. Much of the increase will be in labor-intensive categories like seafood, of which China is now the world’s largest producer and exporter.

As shipments soar, import markets like the EU and US will find themselves severely short of the resources needed to check Chinese food. Since 2005, the US Food & Drug Administration has only has the capacity to inspect about 1.5% of Chinese imports.

Hard to swallow

Thankfully, the private sector has to some extent filled the gaps left by the official inspection process. Concerns over food quality have helped to spawn a cottage industry of capable specialists who audit Chinese farms and factories for overseas buyers. These specialists also help Chinese food processing firms obtain international quality certifications, such as the ISO 22000.

According to Kevin Tilstone, the CEO of KTech Food Consultancy, scandals have encouraged Chinese food safety authorities, such as the China Inspection Quarantine, to step up factory inspections of firms that ship food overseas. Yet the absence of training for food safety professionals remains a problem.

“China’s education system is lacking in practical aspects. You do a three-year master’s in food safety, but the first two are largely spent learning English,” said Tilstone, who holds a degree in food science from Britain’s Humbershire University. “In the last few years food safety has developed, but not to UK standards.”

Corruption poses another major problem to the system. Many violations continue to stem from food safety and quality certifications being forged or obtained on false information, Tilstone said.

Perhaps as a result, foreign retailers in China often complain that they face far stricter regulations than their local counterparts. According to a senior executive at a major European big-box retail chain in China, “Our suppliers are checked. Stores are checked and sterilized, yet we get far more attention than some of the local supermarkets, many of which are part-owned by the local government.”

To avoid being named and shamed on food safety issues, foreign companies must manage relations on a provincial level, the retail executive added. “We have put a lot of effort and resources into government relations, so we will get a heads up from local authorities if anything’s wrong,” the retailer said.

A Beijing-based importer of Mediterranean food and coffee products for local processing and sale described the extreme measures he takes to secure a vital “S” mark on his packets, which denotes that the product has met Chinese safety standards.

He sends samples four times a year to the local General Administration of Quality Supervision, Inspection and Quarantine, along with a processing fee of about US$400 each. He allows inspectors to comb through his production facility once every three years, costing him US$9,500 per visit, as well as a lot of time. “Some of my local competitors escape all of this, they don’t bother,” he said.

Slow going

Although incidences of tainted factories and ill-gotten quality certifications remain widespread, China’s food regulators have been making concerted efforts to improve food safety inspections. Much of the progress has been made on the consumption side, particularly in restaurants.

Under regulations issued last year, restaurants are now required to prominently display a sign with the results of their inspection by the Public Health Bureau. The sign bears a cartoon face that is smiling, indifferent or sobbing, evidently mimicking the inspector’s face upon seeing the kitchens. The system has clearly incentivized owners to clean up.

The State Food and Drug Administration, which sets standards for food safety and inspection, has also recently begun to increase its frequency of inspections.

“[The SFDA] examines our certifications, the neatness of the restaurant, the health condition of the workers and the quality of all our food,” said Liu He, a manager at the Dalian Seafood Restaurant chain in Beijing. “Trainers point out ways to improve hygiene and cleanliness.”

Welcome to the jungle

But in the factories and farms that supply materials for many restaurants and much of the country’s packaged food, the situation remains far from ideal. The most basic problem is that China’s industry is diffuse, with small firms far too numerous to regulate.

In the industry that spawned the country’s most tragic run-in with tainted food – dairy – there have been some significant changes since the 2008 melamine scandal that led to the death of six infants and the hospitalization of 860 more. Last year, the government began to phase out the smaller dairies that are harder to supervise by shuttering 4,000 operations.

Yet the industry continues to lack national quality standards. “The high end is regulating itself,” said Alex Pearson, an Australian veterinarian who advises large Chinese dairy firms including Sanyuan and Mengniu on farm management. “But there are still ‘milk doctors’ out there tampering with protein using sugar and fat,” he said.

Many quality issues stem from problems with animal husbandry at small farms, Pearson said. These issues result in low yields, tempting some local farmers to tamper with their milk.

Much of China’s milk is produced at these small farms: Some 84% of Chinese cow farms have less than 500 cows, while 40% have fewer than 10 cows. Ongoing consolidation will force that system to change. The US market was once as diffuse, but now 3% of its farms contribute nearly 50% of milk supply. “These are similar problems to those earlier experienced by the dairy industry in Europe and Australia,” Pearson said.

But China is just at the beginning of a gradual consolidation and improvement process common to developing countries. The process will surely be slow and painful, but a shakeout is inevitable as consumer standards rise. After eight years in China, Tilstone of KTech Food Consultancy sees a similar consolidation process going on in export-oriented food processor firms.

“Given the investment needed to secure foreign certification, many [companies] will decide it’s not financially feasible or worthwhile for them to install a laboratory and alter their factory process flows,” he said. “These firms will leave the market.”

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